15. April 2021 | 07:24 CET
Coinbase, Plug Power, NSJ Gold Corp. - Bitcoin, inflation, gold - triple whammy!
The crypto craze has erupted. Nothing is currently causing as much of a stir as cryptocurrencies, their trading platforms and all the service companies surrounding them. Never before have there been such price surges in associated assets in such a short period. There is widespread talk of the crypto world as a means to combat inflation and provide a new payment system. Let's be honest: a currency that fluctuates by more than 500% every six months is hardly suitable for mapping the payment flows of millions of transactions in the goods sector. A Bitcoin that cost EUR 10,000 in the summer of 2020 has reached prices of over EUR 50,000 today. How should one deal with this alleged "currency" - Impossible, as Bitcoin itself is probably inflationary!
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ISIN: US72919P2020 , CA62973P1071 , US19260Q1076
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Coinbase - The 2021 Listing of the Year
The cryptocurrency exchange Coinbase made its stock market debut yesterday in New York. The San Francisco-based company was founded in 2012 and claims to be used by more than 43 million people in over 100 countries.
At USD 381, representing a total valuation of the platform of around USD 100 billion, the initial price was well above the reference price of USD 250 per share set the day before. Immediately after the stock exchange opened, the newcomer subsequently climbed to USD 429.50, which corresponds to an increase of a good 71%. Since Coinbase had opted for a direct listing instead of a traditional initial public offering (IPO), NASDAQ had set the IPO price. No new shares are issued in a direct listing, but only existing securities owned by previous investors are offered for sale.
The Company saw a massive increase in revenue this year due to the surge in bitcoin and other cryptocurrencies. Coinbase reported estimated revenue of USD 1.8 billion in the first quarter of 2021, a nine-fold increase from 2020; nearly 45% of revenue is likely net income. Bitcoin hit a new record high yesterday of more than USD 64,800 and has more than doubled in value since the beginning of the year.
We will keep an eye on how the crypto world continues to inflate. Endless growth seems to be expected here among investors. After the high, the Coinbase price sank by 20% to under USD 350 - someone appears to be selling!
Plug Power - The right way leads downwards
We had already discussed another example of total exaggeration here several times. Now it turns out that our view is starting to catch on, as Plug Power has lost more than 60% since the first sell recommendation. And the downward story continues!
Yesterday, the value reached below USD 29. The high was above USD 73. Morgan Stanley resumed the hydrogen fuel cell maker's coverage with an "equal-weight" rating due to valuation concerns. Analyst Stephen Byrd said the Latham, NY-based Company's stock price already reflects much of the expected rapid growth ahead of the Company.
Analysts believe that the Company's strong balance sheet and strategic partnerships make it well-positioned right now. The transition to the hydrogen economy will likely take longer. "Even after modeling in double-digit revenue growth through 2050 and significant margin expansion, the discounted cash flow analysis results in a modest 8% upside from current levels," analyst Byrd said. With a price-to-sales multiple of 18, he sets a price target of USD 35.
The Plug Power share was highly celebrated over the last few months because foreign investors, especially from South Korea, were massively involved, but it only went down after this deal. We currently see no reason to buy back Plug Power shares.
NSJ Gold Corp - Searching for gold in Arizona
A completely different scenario is building up for the new gold explorer NSJ Gold from Canada. Because far from exaggerated valuations, NSJ Gold is a start-up with excellent prospects.
NSJ Gold holds an option to acquire a 100% interest in the Golden Hills project in Arizona, USA. The property is located 100 miles west of the Kay Mine (owned by Arizona Metals Corp.) and 80 miles south of the Moss Mine (owned by Northern Vertex Mining Corp.). The property consists of seven patented and 94 unpatented mining claims totaling 1,970 acres.
Historically, the Walker Lane District has produced 50 million ounces of gold and 400 million ounces of silver. It is the best mining location in Arizona and the infrastructure is excellent because of the surrounding mining companies. The project's characteristics can be described as classic gold-copper porphyry mineralization. Exploration costs are estimated at about USD 4.6 million for the next 5 years. Currently, there is CAD 1.8 million left in the treasury, which is enough to get the initial drilling underway.
What is exciting about NSJ Gold is that this is a very young project in a very prospective location. The 23 million shares are currently trading at CAD 0.23, giving the Company a valuation of CAD 4.8 million. The listing was launched in Frankfurt at the beginning of April. Those who do not want to miss the upcoming gold turnaround should invest part of their precious metal position in NSJ Gold, as the story is still at the starting point.